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ABI response to HM Treasury Freedom and choice in pensions announcement on the Guidance Guarantee

HM Treasury has today responded to the Freedom and choice in pensions consultation which was announced during the Budget.

This details the government's approach to help deliver the Guidance Guarantee to pension customers from April 2015.

Commenting on the announcement, Otto Thoresen, Director General, ABI said:

"This is a sensible and pragmatic approach which will help deliver the Guidance Guarantee in April.  Providers are absolutely committed to working with the Government and not for profit organisations to make this work for customers.

"The ABI welcomes the Government’s decision to deliver the Guidance Guarantee in cooperation with existing groups such as TPAS and MAS following an in depth and thorough consultation process with the industry and key stakeholders. The ABI believes it is essential to adopt this approach to ensure that the Guidance Guarantee is ready for April 2015. We also believe the Government and FCA should continue to review the role of providers and utilities once the content and standards for the Guidance Guarantee become clear. We now have an aggressive timeline to work towards and will be liaising with Government, MAS, TPAS, our members and the regulator and will focus our efforts on getting this service up and running by April 2015, so savers are able to take advantage of this new service.

On DB to DC transfers, Otto Thoresen said:

"Maintaining the flexibility to transfer from DB to DC is the right decision. We are pleased the Government adopted our suggestion of mandating independent financial advice for anyone considering this momentous step."

On Pensions recycling, he said:

"Ministers have made the right decision on how to balance greater freedom and choice with the need to prevent tax avoidance. They are to be commended for listening to provider advice about how best to tackle the problem without creating new loopholes. We strongly support this decision.”

The ABI and its members will be working hard to ensure the full range of reforms are in place to ensure an effective market in April 2015.

Last updated 01/07/2016